Successful businesses often owe their success to several common key traits: having a clear vision of where they want to be, establishing an actionable business plan, having the ability to adapt and change, and being financially prepared for the challenges along the way. As a business owner, setting business goals that are specific, measurable, attainable, relevant, and time sensitive create a road map that you can work towards to grow your business into what you envision it to be.
Without clear short- and long term business goals in mind, there is little in the way of measuring your successes and failures along the way. In this week’s featured article, we look at how to set business goals the SMART way and some types of business goals you can work towards to help achieve success in your business.
How to Set Business Goals – Setting Business Goals the SMART Way
Developed in 1981 by George. T Doran, S.M.A.R.T goals are a clear and simple framework that serves to define and manage goals and their outcomes. As a business owner, setting SMART goals can help clearly define your goals and objectives in a measurable way while at the same time reducing the risks of setting goals that are vague or unclear.
Goal setting should be specific. All too often business owners set goals such as ‘grow my business’ or ‘make more monthly sales’. When goals are not specific there is no way to measure and track your success. Instead, try setting goals such as ‘increase customer base across a targeted area’, or ‘double sales revenue through online streams’. When goals are specific, they are easier to focus your full attention on. When you don’t know what you’re working towards, it’s easy to get sidetracked.
Building upon setting business goals that are specific, business goals need to be measurable. When goals are measurable, they can be tracked, compared, reflected and improved upon. Examples of measurable goals might be to ‘increase monthly turnover by 25%’ or ‘decrease customer acquisition costs by 10%’.
Every goal your business sets needs to be attainable. This is not to say that you shouldn’t set long-term goals that might be temporarily out of reach. Instead set a series of attainable short term business goals that can become the stepping stones for a long term goal. If one of your long term business goals is to become a top 3 new home builder in your local area and you are just getting started in the building industry, it might be more attainable to target a smaller goal such as a renovations or extension builder instead.
Goals need to be relevant and based on the conditions of your industry and the current business climate. There’s little benefit in setting goals that don’t relate to your business or that won’t help your business achieve its vision and plan. An example of a relevant goal might be ‘to establish yourself as an online grocery delivery service in an area where the primary clientele are busy working professionals’.
Finally, your business goals need to be time-based. Goals that are time-based can be worked towards and are subsequently more likely to be achieved. While you may not know the exact time frame in which a goal can be achieved, by creating that goal post you will be more inclined to work hard towards achieving your goals.
Types of Business Goals
Short Term Business Goals
Short term business goals are the ones you want to accomplish in the next 6 months or less. They help create the stepping stones necessary to achieve your long term business goals and vision by being more achievable in the short term. Five great examples of short term goals might be:
- Develop a digital marketing strategy to establish my business’ online presence.
- Create an employee incentive program to reward hard work and motivate employees.
- Test a new product line with a regional focus groups.
- Conduct competitor research for a new target market.
- Improve customer service quality.
Long Term Business Goals
Long term business goals are designed to look ahead 3 or 5 years in the future. These goals help to set your business vision and creating a roadmap of your future business growth. Some examples might include:
- Creating an instantly recognisable brand.
- Achieving an X% market share within 3 years.
- Get in the top 3 search results for a high-volume keyword on Google.
- Set up a production facility to reduce the risks associated with importing products from overseas.
- Take your business public with an IPO.
Financial Goals for a Business
Financial goals for a business or the ‘financial side’ of goal setting is just as important as most business owners are in business to make money. Without a solid financial foundation, even the best products or ideas can fail. Financial goals for a business can be both short and long term and can include:
- Improving your cash flow planning and strategy.
- Increasing revenue by X% over a period of months/years.
- Reducing business debt by a certain amount over time.
- Building a reserve fund for X months’ worth of expenditures.
- Decreasing operating costs through cost-cutting, improved supplier relations etc.
A business that plans and sets goals is one who is most likely to succeed.
Interested in learning more about setting business goals and how setting the right goals can become the foundation of your business success? Speak to one of our business advisors from our accounting firm on (07) 3391 1188 for specialised structuring, cashflow, and goal setting advice and learn how to ‘grow my business’ today.
*** This publication is for guidance only, and professional advice should be obtained before acting on any information contained herein. Neither the publishers nor the distributors can accept any responsibility for loss occasioned to any person as a result of action taken or refrained from in consequence of the contents of this publication. Publication date July 2020